Brazil’s Vale SA said Friday it was in negotiations with an investor over the sale of a stake in its Mozambique coal assets, responding to reports it is selling the stake to Japanese trader Mitsui & Co. On Thursday, Reuters cited two sources as saying that Vale was poised to sell a 15% stake in its Moatize coal mine to Mitsui for about $450 million.
It will announce the transaction’s details “if and when a deal is reached,” Vale said.
Mitsui declined to comment.
Vale, which has been hit by a dramatic fall in the price of its key profit driver iron ore, said a year ago it was looking to sell a 15% to 25% stake in its coal assets, spread between Australia and Mozambique.
Moatize, one of the largest metallurgical coal mines in the world, was seen as Vale’s best asset in the portfolio by far.
Metallurgical coal is used to make coke, a key raw material for steelmaking.
It has not been an easy market in which to find a buyer. Coal prices have declined steadily for more than three years as demand has failed to keep pace with rising production.
Last month European coal futures fell to $69.60 a tonne, their lowest since 2007.